According to the Domain Rent Report, unit rent prices in Australia have risen more quickly than homes, especially after international students return to the country.
Both house and unit rents are at a high price in Sydney as per the Domain Rent Report published in September 2022, with unit rents hitting a record high of AUD 550 (INR 29,500) per week for the first time since 2018.
The report said that international and domestic travel, foreign migration and return of foreign students have also added to the pressure of demand. These figures have shown a faster rise in unit rents than houses in a year. It is growing at the fastest pace on record and at the fastest pace since 2009 for homes.
In the September quarter, house rents in Sydney increased by 4.8 per cent, the highest increase since 2019, which means that tenants must pay AUD 650 (INR 34,750) weekly.
The data also indicates that Sydney has a flame vacancy rate of 1.1 per cent and a more competitive environment for tenants than before the COVID-19 pandemic. The situation has worsened with the record low number of properties available for rent, a 55 per cent decline in a year and more than half of 55 per cent after 2021.
Demand has been under pressure due to a number of factors, including the return of skilled migrants and international students, and the lack of affordable home ownership.
Melbourne, on the other hand, has seen a recovery in its rental market which has almost completely recovered from the COVID-19 pandemic. While home rentals in the city increased by 2.2 per cent to a new high of AUD 470 (INR 25,200) per week in the quarter, Melbourne remains the most affordable capital to rent a home.
Unit rentals in Melbourne have increased by 3.7 per cent to AUD 425 (INR 22,720) per week, a 14.9 per cent increase since 2008, the highest annual increase for that year.
“The recovery in the rental market is also supported by the return of international students and overseas migration, lack of affordability, weak investment activity during the pandemic, changes in domestic formation and some investor sell-offs,” the report further said.
Rents even in Perth, which remains Australia’s second most competitive capital city rental market, have risen significantly over the past two years.